No New Farm Bill Yet--What's Next?
Oct 01, 2018
On Monday, October 1, the Agriculture Act of 2014 expired, with no new farm bill yet completed to replace it. The staffs of the Senate and House Agriculture Committees and the conference committee members from both bodies have been working diligently since late July to reconcile the many differences between the House and Senate farm bill versions passed during the summer, but they have not yet been able to complete that work and present a single conference version to the House and Senate for final consideration.
At this point in time, there has been no move on the part of the Agriculture Committee leadership in either the House or Senate to offer legislation that would extend the provisions of the 2014 farm bill for some length of time until a new one is in place, as has been done in the recent past when other farm bills expired without replacements.
Instead, those members of Congress appear to have made a deliberate decision to not seek an extension, apparently fearing that such a move would reduce Congressional incentive to expedite completion of a new farm bill. Consequently, the House of Representatives adjourned for the fall election season on September 28, and is not due to return until mid-November. This step makes an extension impossible in the short run, even if Ag Committee leadership were to change their minds.
What does this lack of action mean for farmers and others who participate in USDA programs authorized in the farm bill, whether the commodity programs in Title I, conservation programs in Title II or any of the other ten titles? Although the 2014 farm bill has formally expired, spring planted crops due to be harvested this fall are still covered by the commodity programs which the farmers are enrolled in, either PLC or ARC, as well as the marketing loan program. The federal crop insurance program is permanently authorized, although there are a couple of related provisions, such as the Agricultural Management Assistance Programs, established in the Agricultural Risk Protection Act of 2000, which does expire. The single largest program in the farm bill, the Supplemental Nutrition Assistance Program (SNAP), will also continue to operate despite the expiration of the 2014 farm bill. SNAP receives discretionary funding through Congress’ annual appropriations process. Because it receives appropriations from outside of the farm bill process, it does not need to rely on the farm bill for continued operation.
Since the 1996 farm bill, Congress has chosen to suspend the provisions of the so-called permanent farm legislation, primarily the parity price support programs established in the Agricultural Adjustment Act of 1938 and the Agricultural Act of 1949, rather than repeal them entirely. Absent a new farm bill in place, the farm safety net reverts to those earlier programs, which provided price supports based on commodity prices that prevailed during the so-called Golden Era of Agriculture, 1910-14, adjusted for inflation. Because these laws are still on the books, USDA regularly calculates the parity prices for a range of agricultural commodities--as of August 2018, the parity price for corn was $13.20 per bushel. That level is more than 350 percent of the current projected 2018/19 market price for corn, reported as $3.50 per bushel in the September 12 WASDE report.
During the course of the last farm bill debate, there was a period during which the previous law (the 2008 farm bill) was allowed to expire, and USDA was able to stall sufficiently long enough for Congress to pass a new farm bill in February 2014 before they were forced to implement the permanent law programs, a period of about four and a half months. However, if Congress fails to pass a new farm bill during the lame duck session in November and early December, they will have to start all over again at the Committee level in 2019, likely taking several more months to complete. That would create a farm bill lapse of at least six months and probably longer, which would be unprecedented in recent farm bill history.
This situation also leaves several programs with no funding and/or authorization until a new farm bill is in place. Most notably, USDA’s Farm Service Agency has already sent out a notice to its offices to halt new sign-ups under the Conservation Reserve Program, as has NRCS for the Conservation Stewardship Program (CSP). Similarly, USDA’s Foreign Agricultural Service will have no funding to disburse under the Foreign Market Development Program (FMD), a program used by U.S. agricultural groups to fund their overseas activities on a matching basis. The same also applies to dozens of smaller programs helping a wide variety of farmers, including organic producers and new and beginning farmers. The Chairman of the Senate Agriculture Committee, Senator Pat Roberts (R, KS) has urged USDA to find ways to keep these programs funded during the interim period, but it is not clear they have the authority to do so.
The best hope for alleviating the problems created by the failure to reach agreement over a farm bill will be for a final deal to be reached once Congress re-convenes after the mid-term elections on November 6th. However, if control over one or both of the bodies changes hands for the next Congress as a result of those elections, that might complicate the politics of completing a bill.